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Business News

GM boss faces questions over Vauxhall jobs

Union leaders will today press a top executive of car giant General Motors for assurances about jobs at Vauxhall factories in the UK.

Leaders of Unite will hold talks with Nick Reilly, the US firm's head of operations in Europe, who will meet Business Secretary Lord Mandelson.

The meetings will be the first chance unions and the Government will have to ask detailed questions to GM over its future plans since the car maker decided not to sell its European operations, including Vauxhall.

Mr Reilly will be pressed about GM's long-term plans for the Luton and Ellesmere Port plants, which employ thousands of workers.

He has said that decisions about the future of plants across Europe should be taken by next month.

The Government has said it will consider offering financial support to help secure the future of Vauxhall.

Unite's joint leader, Tony Woodley, will seek assurances over the future of Vauxhall's 5,500 UK workers, although some job losses are expected as GM moves to cut costs.

GM had struck a deal with Canadian car parts maker Magna to sell its European business, which was set to cost hundreds of jobs in the UK.

The German government had pledged to give Magna three billion euros in loan guarantees to help secure German factories.

But GM suddenly cancelled the sale earlier this month in the face of an "improving business environment" for the firm.

GM announced in the United States yesterday that it would start paying back its government loans earlier than expected, making its first payment of 1.2 billion dollars (£717 million) to the US government next month, years ahead of schedule.

Fritz Henderson, GM's president and chief executive, would not comment on the number of likely job cuts expected from a restructuring of the Opel and Vauxhall business in Europe, which employ around 54,000 workers.

But he gave a vote of confidence in the Ellesmere Port plant, which has just started production of the new Astra model.

"Ellesmere Port is the lead plant building our new Astra. If that's not a better signal about the future of the plant, I don't know what is.

"I've been there a number of times and the team has done a remarkable job. We feel very good about the plant - so good that we made it the lead plant for the Astra. Actions speak louder than words."